J.P. Morgan Lists FGN Bonds in New Emerging Markets Bond Index

Selected Federal Government of Nigeria (FGN) Bonds have been included in J.P. Morgan’s newly introduced Government Bond Index–Emerging Markets Edge (GBI-EM Edge), marking Nigeria’s return to a J.P. Morgan benchmark for the first time in more than a decade.

The development was announced by the Federal Ministry of Finance on Monday, with the government describing the inclusion as a reflection of improved investor confidence in Nigeria’s domestic debt market following ongoing economic reforms.

The GBI-EM Edge tracks local-currency government debt across frontier emerging markets. Nigeria has been assigned a 7.40 per cent weighting in the index, one of the highest among the 26 markets covered and close to J.P. Morgan’s eight per cent maximum country weighting.

According to the ministry, Nigeria met the index’s key eligibility requirements, including market liquidity and issuance size. FGN Bonds are actively traded under a Two-Way Quote System, while outstanding volumes across eligible tenors exceed the minimum $250 million threshold required for inclusion.

Nigeria previously featured in the GBI-EM after FGN Bonds were first included in the benchmark in 2012. The country exited the GBI-EM Global Diversified Index in 2015 amid foreign exchange liquidity constraints.

The Federal Government said reforms undertaken under President Bola Ahmed Tinubu’s administration, including measures to stabilise the naira and clear the foreign exchange backlog, have helped address some of the conditions that previously affected Nigeria’s participation in international bond benchmarks.

The ministry said the latest inclusion could attract additional foreign portfolio investments into Nigeria’s domestic bond market as index-tracking funds adjust their portfolios to reflect the country’s weighting.

The GBI-EM Edge currently tracks approximately $328 billion in local-currency government debt globally. Nigeria’s 7.40 per cent allocation represents about $17.47 billion of eligible FGN debt across 16 instruments.

The government also expects increased demand for FGN Bonds to support bond prices and gradually reduce domestic yields, potentially lowering the cost of servicing naira-denominated debt.

The ministry added that improved liquidity in the FGN bond market could have positive effects across the wider domestic debt market, including Nigerian Treasury Bills, even though the new index focuses specifically on mid- to long-term government bonds.

Commenting on the development, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, described the inclusion as an independent endorsement of the economic reform programme.

“This inclusion is a clear, independent endorsement of the discipline behind President Bola Ahmed Tinubu’s reform agenda,” Oyedele said.

He added that the development reflected growing confidence among international capital markets in Nigeria’s economic management and could help reduce the cost of financing the country’s development priorities.

Oyedele, however, noted that more work remained to be done before Nigeria could achieve full reinstatement in J.P. Morgan’s flagship index.

The Federal Ministry of Finance said the Federal Government would continue implementing its reform agenda and working to deepen investor confidence in Nigeria’s domestic capital market.